The questions you should ask
Are you a fiduciary to your clients? Yes!
Yes. As a CERTIFIED FINANCIAL PLANNER™ I and my firm, Compass Retirement, LLC, a registered investment advisor, are a fiduciary to our clients. Obligated by law to act in every client’s best interests at all times, we are registered and regulated by the Connecticut Department of Banking, the State of Florida and various other organizations and jurisdictions.
Why is having an advisor who is a fiduciary so important?
Many financial advisors are not fiduciaries. Advisors aren’t acting in a fiduciary capacity if they accept commissions. Advisors rewarded by commissions when selling investment products are not legally bound to serve the best interests of you, the client.
Why have clients joined me?
My newest clients sought out my services because they lacked the confidence in their current advisor.
New clients often seek out my services for a number of reasons but lack of confidence in their current approach is generally #1… more simply said: They were uncomfortable… and lacked confidence in their advisor.
As I recount the addition of recent new clients, I find myself somewhat amused (at their current adviser’s expense in these cases) for many of the reasons they were not confident and remained uncomfortable. A few of the contributing reasons….
- The adviser, apparently not confident in his investment approach, deployed three different portfolio allocation approaches plus a small annuity all within the same one account. I guess, in an effort to appear “diversified”? This is also-know-as: If I keep it confusing, the client will think I am smart.
- The client, 12 years away from retirement and requiring growth, was confused on why the adviser had the client primarily invested in bonds. AKA: I may be busy with my other clients, generally clueless or my golf game.
- The client felt the adviser wasn’t interested in talking through budgeting concerns or debt strategies. AKA: Just give me the money you have, I (the adviser) don’t get paid for more challenging issues.
- The adviser did not address the concerns of the female spouse, nor even speak to her directly. AKA: Clearly the adviser is intimidated by prudent questions from a successful woman.
- The client was uncomfortable with an adviser created Microsoft Word document as a means to detail the “success” of the client while with the adviser. AKA: Hi, Mr. Madoff, can you explain the need for a “hand crafted” performance document?
Friends, contacts and acquaintances: There are thousands of financial advisers out there. If you aren’t confident in your current adviser, get a second (or third) opinion. You will eventually find someone that communicates effectively, employs a comprehensive yet straightforward approach and takes an active interest in your success.
Why should I hire a financial adviser?
I often liken working with a financial adviser to that of fitness training: If you are extremely disciplined in showing up at the gym, read all the placards on the machines and follow the instructions carefully, maintain a healthy diet and balance strength vs cardio training, you may be able to accomplish 90% of what you could accomplish working with a professional health and fitness coach.
Financially speaking I believe the same logic applies. That said, if you don’t want to exert the effort required to fully “exercise” your financial mind, BUT would like to perform at a very high level you should consider hiring a quality adviser.
How can a financial adviser add value?
There is a healthy and ongoing debate about the potential value that a financial adviser/planner can add. There are really two ways an adviser can add significant value: improved short and long term planning and improved asset management (risk management, coaching, controlling costs, suitable portfolio construction).
Does Compass Retirement have an account or relationships minimum?
Yes, a minimum of $500,000 across a family of accounts exists, although exceptions may be made.
How am I compensated for providing advice?
I do not sell individual investment products nor do I receive commissions for assisting with investments. No investment firms pay me to sell their products.
I an compensated by client fees. Fees are based upon a percentage of the market value of assets managed or a fixed yearly fee.
Fees are based on the average market value during the billed quarter. Email or call me (877.523.5503) for more about my fees.
Clients may incur transaction fees from the broker-dealer through which the investments are purchased or sold. Mutual funds and exchange traded funds also charge annual management fees but Compass Retirement doesn’t retain nor benefit from any of these fees.
What type of investments do you generally use?
Compass Retirement, LLC primarily employs active allocation that includes factor and index strategies. Generally a client’s portfolio will include a mixture of stocks, real estate and bonds. The actual investments are made in the form of Mutual Funds or ETFs (eletroncially traded funds).
Where are assets held and how are they protected?
Where are clients’ assets kept?
The majority of client’s accounts are held at First Clearing, a trade name of Wells Fargo Clearing Services, LLC. I can also advise on assets held at your current custodian/brockerage or 401(k) plan.
TradePMR Inc, member FINRA/SIPC is my clearing firm and offer in-depth broker/dealer services with full transparency to your accounts at all times. TradePMR, located in Gainesville, Florida, provides services only to independent registered investment advisers.
Uninvested cash balances are either held in an interest bearing deposit account which is FDIC insured, or, if available, a money market mutual fund, which is SIPC insured.
The Securities Investor Protection Corporation (SIPC) was created in 1970 as a non-profit, non-government membership corporation, funded by member broker-dealers. SIPC provides coverage to investors on their brokerage accounts up to the limits below if their brokerage firm becomes insolvent. All brokerage firms that sell stocks or bonds to the investing public, or that clear such transactions, i.e. introducing or clearing firms respectively, are required to be members of SIPC.
TradePMR and First Clearing SIPC Coverage:
TradePMR, Inc. 1 and First Clearing, LLC2 are members of the SIPC. First Clearing, as the chosen clearing firm of TradePMR, is a registered broker-dealer, non-bank affiliate of Wells Fargo & Company, and a leading provider of clearing and custody services to financial institutions. Securities and cash in client accounts held at First Clearing have two sources of protection from firm insolvency. The first is SIPC coverage, which insures each client up to a maximum of $500,000 (including up to $250,000 for claims for cash)3.
For more information about SIPC, please visit sipc.org.
In addition, First Clearing maintains a program of additional protection provided through Lexington Insurance Company, (“Lexington”) an AIG Company. For clients who have received the full SIPC payout limit, First Clearing’s policy with Lexington provides additional coverage above the SIPC limits for any missing securities and cash in client brokerage accounts up to a clearing-firm aggregate limit of $1 billion (including up to $1.9 million for cash per client). Please note that coverage provided by SIPC and Lexington does not protect against the loss of market value of securities. All coverage is subject to the specific policy terms and conditions.
At First Clearing, balances in the Bank Deposit Sweep Program are insured up to $250,000 per depositor per affiliated bank by the Federal Deposit Insurance Corp. (FDIC) for a total of $1,000,000 in FDIC insurance coverage when deposited in all four Wells Fargo affiliate banks (insurance coverage amounts may be higher for certain accounts depending on the number of account owners/beneficiaries.) Through this program, uninvested cash balances are deposited, or swept, into four affiliated banks, each of which is eligible for deposit insurance of up to $250,000. Balances in the Bank Deposit Sweep in excess of $1,000,000 will be deposited at Wells Fargo Bank, N.A., and may not be FDIC insured.
The bank deposit sweep is not subject to market risk and value loss but is subject to the risk of a bank’s failure. In the unlikely event a bank fails, deposits at each bank are eligible for FDIC insurance protection. You are responsible for monitoring your bank balances in this program and the balances in any of your other bank accounts at the same bank to determine if these, in total, exceed FDIC insurance limits. If your total funds in deposit at any Program Bank exceed the applicable FDIC insurance limit, the FDIC will not insure your funds in excess of the limit. Monies held in the Bank Deposit Sweep are not covered by SIPC. For further information regarding the Bank Deposit Sweep Program, refer to the Cash Sweep Program Disclosure Statement. A copy can be obtained from your financial professional.
- TradePMR is an introducing broker-dealer, Member FINRA/SIPC.
- Brokerage accounts carried by First Clearing, LLC, Member FINRA/SIPC.
- SIPC coverage is not the same as nor is it a substitute for FDIC deposit insurance. Securities investments purchased through TradePMR and First Clearing are not FDIC insured and may lose value.
How do you invest portfolios?
Compass Retirement, LLC utilizes mutual funds and ETFs (electronically traded funds) from select fund families like Dimensional Funds, Vanguard, American Funds and iShares. Each client’s investment portfolio is customized and designed to meet their particular investment needs, preferences, age, distance until asset use, need for income and tolerance/capacity for risk.
Appropriate pre-existing holdings may be incorporated into client portfolios. Accounts not managed by Compass are often included during allocation planning.
Is my money available if I need access to it?
Yes, absolutely. All client have daily access to their assets.
All written content on this site is for information purposes only. Opinions expressed herein are solely those of John Bubello of Compass Retirement, LLC unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to an other parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.
This website may provide links to others for the convenience of our users. Our firm has no control over the accuracy or content of these other websites.
Advisory services are offered through Compass Retirement, LLC; an investment advisor firm domiciled in the State of Connecticut. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute.
Follow-up or individualized responses to consumers in a particular state by our firm in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant an applicable state exemption.
For information concerning the status or disciplinary history of a broker-dealer, investment advisor, or their representatives, a consumer should contact their state securities administrator.
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We respect the privacy of all our clients and prospective clients, both past and present. We recognize that you have entrusted us with non-public personal information and it is important to us that all employees and clients of our firm know our policy concerning what we do with that information.
We collect personal information about our clients from the following sources:
- Information our clients provide to us to complete their financial plan or investment recommendation
- Information our clients provide to us in agreements, account applications, and other documents completed in connection with the opening and maintenance of their accounts
- Information our clients provide to us orally
- Information we may receive from service providers, such as custodians, about client transactions
We do not disclose non-public personal information about our clients to anyone, except in the following circumstances:
- When required to provide services our clients have requested
- When our clients have specifically authorized us to do so
- When required during the course of a firm assessment (i.e., independent audit)
- When permitted or required by law (i.e., periodic regulatory examination)
Within our firm, we restrict access to client information to staff that need to know that information. All personnel and our service providers understand that everything handled in our office is confidential and they are instructed to not discuss client information with someone else that may request information about an account unless they are specifically authorized in writing by the client to do so. This includes, for example, providing information about a spouse’s IRA account; children about parents’ accounts, etc.
To ensure security and confidentiality, we maintain physical, electronic, and procedural safeguards to protect the privacy of client information.